This study examined whether there are processing differences between children with Down syndrome (DS; n = 22; 7 years 8 months to 13 years 10 months) and typically developing children (TD; n = 22; 6 years 6 months to 10 years 10 months), matched for receptive vocabulary. The TD children performed better on tests of nonverbal intelligence (matrices), phonological awareness (sound deletion), and phonological short-term memory (digit span), as well as spelling accuracy (30 single words). Separate regression analyses revealed that nonverbal intelligence and phonological awareness were the best predictors of spelling accuracy for TD children, whereas receptive vocabulary and phonological short-term memory were the best predictors for children with DS. An examination of spelling errors suggested that although children with DS do use some phonological awareness during spelling, deficits in short-term memory appear to limit success. The implications of these results for intervention studies are briefly discussed.